Glendale wants out clause; Coyotes deal in jeopardy
JUN 28, 2013 8:32p ET
GLENDALE, Ariz. – If the Phoenix Coyotes’ skeleton staff is ever afforded enough time for creative thoughts, it will have to manufacture a new team slogan. "Hockey the hard way" just doesn’t do this team justice any more.
In the latest twist (we warned you more were on the way) in this four-year-old ownership soap opera, the City of Glendale produced a counterproposal to Renaissance Sports and Entertainment’s arena-lease bid at its Friday executive session, then delivered the deal points in a public workshop -- before delivering them to RSE. This counterproposal supersedes the proposal that was discussed by the council on Thursday in preparation for a vote next Tuesday.
In a statement that even the most ardent judges of the term would have to agree is ironic, Glendale Mayor Jerry Weiers talked about the importance of not negotiating a deal in public or with the media, then did exactly that when the council delivered the new deal points before RSE had seen them.
A Glendale source said the counterproposal was supposed to be sent to RSE in the early afternoon, but RSE attorney Nick Wood didn’t see the deal points before they were posted on the city’s website about 8 p.m. PST, and other RSE representatives found out about them by following reporters’ feeds on Twitter or watching the session online.
You can read the changes here. The full text of the new proposal is here. The changes include an altered structure of parking revenue, altered language to prevent one side from suing the other over issues at the arena and an increase in the city’s percentage of naming rights from 15 percent to 20 percent.
But the big one was Glendale’s call for a five-year out clause that mirrors RSE’s five-year out clause. If the city’s losses total $50 million or more over that time period, it wants the ability to walk away from the Coyotes.
“What we worked on this morning extensively and what we’re proposing to them is some red lines that they took out that we put back in; some things that they put in that we took back out,” Weiers said. “(We’re) trying to make certain that the city is left as whole as possible, because right now the city is carrying all the burdens, has all the liabilities, and that’s not a good place for the city to be.”
The problem with Glendale’s stance?
"The city’s proposal for an out clause is a non-starter,” RSE spokesperson David Leibowotz said. "The city must remove that and return to the initial framework of the deal that was already negotiated."
Anthony LeBlanc, one of RSE’s principals, declined comment, but RSE’s representatives were clearly miffed by the latest turn of events, not the least of which was finding out about the counterproposal online -- a circumstance Weiers said was due to the city having only arrived at the new proposal in its morning session.
"If you want to talk about transparency, then perhaps the people you’re negotiating with should enjoy such transparency,” Leibowitz said in response.
Further angering RSE was that it said its attorneys met with Glendale attorneys three weeks prior to Friday’s session, at which point the city raised the idea of an out clause for itself. RSE informed Glendale that it was not possible, both because their lenders wouldn’t allow it and because the NHL would not allow it. No other team in the league has such an agreement.
When RSE delivered its initial proposal three weeks, ago, Leibowitz said Glendale waited two weeks before it sent its first counterproposal, which was delivered Monday. That one carried no mention of a city out clause. RSE returned some proposed changes on Wednesday, then found out via a social network that Glendale had produced another counterproposal with the out clause included, even though the city knew it was a non-starter from previous conversations.
Weiers and council members including Coyotes supporters Gary Sherwood and Manny Martinez said they were prepared to move forward with a vote on the new proposal, even though RSE will never accept it.
“We’re going to vote on Tuesday,” Weiers said. “The only thing that might happen is they may come back and say, 'You know what, we were kidding. We really didn’t mean what we said,' and I sort of expect that’s exactly what they’re going to say.
"'We weren’t really serious about we’re leaving.' If they are, they are. That’s a risk all of the council members this morning (agreed was) fine.”
But that may not be the end of the negotiations. Sources on each side said that dialogue continued Friday night. According to a Glendale source, there also exists the possibility that the new proposal could be voted upon Tuesday with amendments that council members agree to between now and the meeting. That method would allow the four members who are currently believed to favor keeping the Coyotes to remove the out clause at the last minute.
When asked the NHL's reaction to the current proceedings and Weiers' notion that July 2 is an artificial deadline forced by the NHL, the league's deputy commissioner Bill Daly responded via email:
"He can characterize it the way he wants, but it is what it is. We either get certainty in Glendale by July 2, or we immediately pursue our other options outside of Glendale," Daly wrote. "We have already gone past the date we were comfortable accommodating in the first place. I hope for the sake of the Coyotes fans in Glendale that they don't lose the team because of a miscalculation made by members of the City Council."
So the end game in negotiations appears to be at hand.
“The unknown is how much of this are they going to accept?” Sherwood said of RSE. “To vote on what we’re going to vote on Tuesday, you can probably make a couple changes -- you can probably accept it with a couple amendments. But if there’s a severe change, you can’t do that, because it dramatically changes the contract.
“I think I heard the mayor say that would cause a delay, and I don’t think (the NHL) is going to allow a delay, because they need to move forward with Plan B if this doesn’t work.”
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